SACRAMENTO May 15 (Reuters) - The judge in the bankruptcy
case for the city of Stockton, California, on Thursday extended
the trial into June, after granting one more day to hear
arguments.

U.S. Bankruptcy Judge Christopher Klein proposed a fifth and
final day of trial for June 4, rescheduled from May 29 that he
had proposed earlier on Thursday.

Klein made the decision on what initially was scheduled as
the final day of a four-day trial to determine whether the
northern California city is ready to exit Chapter 9 bankruptcy
protection.

The judge is poised to determine if Stockton's proposed debt
adjustment plan, a blueprint at the center of its
municipal bankruptcy case, is fair and feasible.

Stockton has attracted the attention of the $3.7 trillion
municipal bond market for its treatment of major creditors and
pension obligations.

To date the trial has focused mainly on a single holdout
creditor, two funds managed by Franklin Templeton Investments,
which the city has proposed to pay less than a penny on the
dollar.

On Thursday, proceedings centered on how to properly value
two golf courses that are collateral for Franklin's bonds.

Earlier this week, Klein announced he would decide if the
country's largest pension fund, Calpers, could share losses
similar to other creditors in Chapter 9.

Of particular interested to those following the case is
whether Klein rules that the California Public Employees'
Retirement System can be impaired in Chapter 9.

"The judge is doing the prudent thing by requiring the
pension impairment to be considered," said David Tawil,
president of Maglan Capital, a hedge fund that focuses on
distressed situations. "Calpers may not like it, however the
Pandora's box was opened in Detroit's case."